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Why Fairtrade?

Fairtrade is needed to give producers in developing countries the chance to overcome the unfair trade rules set by the World Trade Organisation.

Under the rules that govern international trade many rich countries, including Britain, impose import tariffs on goods where developing countries typically enjoy a comparative advantage in production, for example bananas, coffee, tea and other agricultural goods. Tariffs are also usually higher for processed goods thus making it difficult for farmers to earn a greater share of the total price paid by the consumer. Furthermore, rich countries subsidise their own agriculture so that farmers in developing countries find it impossible to compete in overseas markets. Worse still, such subsidies often mean that these same farmers cannot compete in their own markets either and are forced out of business.

In contrast, Fairtrade organisations promote a model of doing business that is designed to ensure that farmers and other producers of Fairtrade goods in developing countries receive a fair price that covers the cost of sustainable production and living. Fairtrade is based on long-term partnerships between suppliers and buyers and usually involves a minimum-price guarantee. This removes the risk to the supplier of short-term fluctuations in commodity prices and thus provides them with the opportunity to invest for the future. Fairtrade also encourages the formation of democratic co-operatives where producers pool their resources.

Fairtrade products can be identified by the Fairtrade Mark (shown in the top left hand corner of this web page). In the UK, the Fairtrade Foundation is responsible for defining standards and accrediting products that achieve these standards and so may carry the Fairtrade Mark.